Feeling Taxed
This weekend has been tax calculation weekend for me — the latest I can ever remember having waited to do them. Part of the problem was that this year, half the slips I needed never seemed to show up. And to complicate things further, it's not exactly clear for an American living in Canada having to file his US tax return how he's supposed to account for his Canadian and entirely non-American wife on his return.
Were I to have a dialogue with the return (hypothetically, of course — not fully admitting that I actually talk to these things, although it's a possibility), it would go something like this:
US Tax Return: Hey, Matt, next question. Are you still single like last year?
Matt: No, I got married last year.
US Tax Return: Oh, cool. Congratulations. What's your new wife's full name?
Matt: [whispers it to the tax thing so the entire internet doesn't hear]
US Tax Return: Great. What's her address?
Matt: Um, she lives with me. Hello?
US Tax Return: Take it easy. I've got to ask these things. What's her phone number?
Matt: Same as my phone number. Jeez.
US Tax Return: Okay, okay. What's her Social Security Number.
Matt: . . .
US Tax Return: Please?
Matt: Can I just say "(CANADIAN)"?
US Tax Return: I'm sorry, that's not a valid 10 digit number,
Matt: Do you want my effing taxes or not?!?!? I don't even live there anymore, and my wife has certainly never lived there. Ever. No SSN. No US address. Her identity is barely your business. Got it?
US Tax Return: Alright, alright. "(CANADIAN)" it is, then. Fine. Happy?
Matt: Thank you.
So I got that all settled out, along with some other issues about whether I could claim my house on my US taxes and that sort of thing, and finished it up.
Despite the fact that the current exchange rate does very very bad things to the IRS's perception of the taxable value of my Canadian income (you know, really, their foreign resident exemption limit should somehow increase when the exchange rate does, too, but I guess that would be a pain to calculate) I got off still owing very little down south. As it should be.
Upon reaching the end of my returns (plural, because I typically do the US and Canadian ones in parallel, because I make less mistakes that way on claiming all the stuff I should, and it's easier to enter foreign income, foreign tax paid, etc, when I can go back and forth between them), I was suddenly rudely reminded why Canada is often such a nicer place to be (notwithstanding the fact that the Canadian return is about half as hard to fill out in general):
Canada Tax Return: Okay, Matt, now we're to the point where you tell me whether you'd like to file by mail, or over the internet via eFile.
Matt: What's the story each way?
Canada Tax Return: Well, by mail is just the same old thing, of course, but if you eFile, we'll give you a $10 eco-rebate. Killing less trees, burning less fuel to transport your return and so on. How's that sound?
Matt: Not bad. US return, what have you got for me?
US Tax Return: Oh same choices, pretty much. File by mail, or file by eFile for a $15 convenience fee.
Matt: So the eFile is . . . wait, what? You're charging me to eFile?
US Tax Return: That's right. Got a problem with it?
So, you got it right folks. In Canada, electronic filing is considered socially and environmentally responsible. In the US, it's considered damn lazy, and they charge you for it.
"But what's that matter when you're paying twice as much tax in Canada as you do in the US?" you might ask.
Well, that's the other thing. Hey. Yeah you. All you potential US voters who've been convinced by the Republican Party this is why Canadian healthcare, social welfare programs, transit, and all-around social niceties give you intolerable taxes? Listen up. This is important.
Okay.
My federal tax bracket the last year I was living in the US: 28%
My federal tax bracket in Canada (even when making almost 20% higher pay by now, by the way, with some pay raises and the shift in exchange rate): 24%
"Sure, sure, but what about the Canadian GST? That's a bitch, right?"
Currently 5%. Used to be a little higher, but we're talking the present.
So even if you assumed that every single last dollar I earned was spent on consumer goods (no savings whatsoever), and GST taxable goods at that, that would put my current rate at 29% Canadian federal tax vs. 28% US federal tax.
It's really pretty amazing when you think about how much more I'm getting for my money.
Free health care. Lower crime. Cleaner air. Better transportation. Better public programs (I love my CBC).
For maybe 1% difference* .
I don't think most Canadians even realize this (most of them never have any more chance to compare the two countries side by side than Americans do).
So yeah. Pretty cool, eh?
* Before you get all quibbly with me about the fact that provincial taxes here are a bit higher than many US states' state taxes, and that cost of living is a little higher in Canada, and that Canada has less tax deductions on some important things like mortgages, yes, I'm aware of these things, and they can bump the final tax bill around a little, but even considering the worst possible combinations of those extra considerations which a single person might have, it's a far cry from "double the taxes" which so many Americans seem to spout out at me. That's all.
Were I to have a dialogue with the return (hypothetically, of course — not fully admitting that I actually talk to these things, although it's a possibility), it would go something like this:
US Tax Return: Hey, Matt, next question. Are you still single like last year?
Matt: No, I got married last year.
US Tax Return: Oh, cool. Congratulations. What's your new wife's full name?
Matt: [whispers it to the tax thing so the entire internet doesn't hear]
US Tax Return: Great. What's her address?
Matt: Um, she lives with me. Hello?
US Tax Return: Take it easy. I've got to ask these things. What's her phone number?
Matt: Same as my phone number. Jeez.
US Tax Return: Okay, okay. What's her Social Security Number.
Matt: . . .
US Tax Return: Please?
Matt: Can I just say "(CANADIAN)"?
US Tax Return: I'm sorry, that's not a valid 10 digit number,
Matt: Do you want my effing taxes or not?!?!? I don't even live there anymore, and my wife has certainly never lived there. Ever. No SSN. No US address. Her identity is barely your business. Got it?
US Tax Return: Alright, alright. "(CANADIAN)" it is, then. Fine. Happy?
Matt: Thank you.
So I got that all settled out, along with some other issues about whether I could claim my house on my US taxes and that sort of thing, and finished it up.
Despite the fact that the current exchange rate does very very bad things to the IRS's perception of the taxable value of my Canadian income (you know, really, their foreign resident exemption limit should somehow increase when the exchange rate does, too, but I guess that would be a pain to calculate) I got off still owing very little down south. As it should be.
Upon reaching the end of my returns (plural, because I typically do the US and Canadian ones in parallel, because I make less mistakes that way on claiming all the stuff I should, and it's easier to enter foreign income, foreign tax paid, etc, when I can go back and forth between them), I was suddenly rudely reminded why Canada is often such a nicer place to be (notwithstanding the fact that the Canadian return is about half as hard to fill out in general):
Canada Tax Return: Okay, Matt, now we're to the point where you tell me whether you'd like to file by mail, or over the internet via eFile.
Matt: What's the story each way?
Canada Tax Return: Well, by mail is just the same old thing, of course, but if you eFile, we'll give you a $10 eco-rebate. Killing less trees, burning less fuel to transport your return and so on. How's that sound?
Matt: Not bad. US return, what have you got for me?
US Tax Return: Oh same choices, pretty much. File by mail, or file by eFile for a $15 convenience fee.
Matt: So the eFile is . . . wait, what? You're charging me to eFile?
US Tax Return: That's right. Got a problem with it?
So, you got it right folks. In Canada, electronic filing is considered socially and environmentally responsible. In the US, it's considered damn lazy, and they charge you for it.
"But what's that matter when you're paying twice as much tax in Canada as you do in the US?" you might ask.
Well, that's the other thing. Hey. Yeah you. All you potential US voters who've been convinced by the Republican Party this is why Canadian healthcare, social welfare programs, transit, and all-around social niceties give you intolerable taxes? Listen up. This is important.
Okay.
My federal tax bracket the last year I was living in the US: 28%
My federal tax bracket in Canada (even when making almost 20% higher pay by now, by the way, with some pay raises and the shift in exchange rate): 24%
"Sure, sure, but what about the Canadian GST? That's a bitch, right?"
Currently 5%. Used to be a little higher, but we're talking the present.
So even if you assumed that every single last dollar I earned was spent on consumer goods (no savings whatsoever), and GST taxable goods at that, that would put my current rate at 29% Canadian federal tax vs. 28% US federal tax.
It's really pretty amazing when you think about how much more I'm getting for my money.
Free health care. Lower crime. Cleaner air. Better transportation. Better public programs (I love my CBC).
For maybe 1% difference
I don't think most Canadians even realize this (most of them never have any more chance to compare the two countries side by side than Americans do).
So yeah. Pretty cool, eh?
* Before you get all quibbly with me about the fact that provincial taxes here are a bit higher than many US states' state taxes, and that cost of living is a little higher in Canada, and that Canada has less tax deductions on some important things like mortgages, yes, I'm aware of these things, and they can bump the final tax bill around a little, but even considering the worst possible combinations of those extra considerations which a single person might have, it's a far cry from "double the taxes" which so many Americans seem to spout out at me. That's all.